When a Negative Externality Exists, _______________________ and Thus _______________ Intervention

question 35

Multiple Choice

When a negative externality exists, _______________________ and thus _______________ intervention may be needed to achieve efficiency.

• A)external costs are necessarily greater than private costs; government
• B)social costs equal private costs; no government
• C)social costs are less than private costs; government
• D)social costs are greater than private costs; government

---

Definitions:

Statement Of Retained Earnings

A financial statement that outlines the changes in retained earnings for a specific period, typically impacted by net income and dividends distributed.

Functional Currency

The currency of the primary economic environment in which an entity operates and conducts its business, crucial for financial reporting.

Straight-Line Method

An accounting method of depreciation that allocates an equal amount of depreciation each year over an asset's useful life.

Currency Exchange Rates

The value of one currency for the purpose of conversion to another, indicating how much one currency is worth in terms of the other.